Assuming regulators allow the deals to go through, these
companies are poised to be global hotel and paint giants.

But but companies don't buy each other just to increase their
footprints. They do it to increase value for shareholders.

One way managers do this is by cutting costs
through "synergies." That word
should make every Marriott, Starwood,
Sherwin-Williams, and Valspar employee a little
nervous.

In the
press release announcing the acquisition, Sherwin-Williams
CEO John Morikis said (emphasis
ours):

"Sherwin-Williams has a long track record of successfully
integrating acquisitions. We are highly confident in the
industrial logic of the transaction and, once closed, our ability
to achieve $280 million of estimated annual
synergies in the areas of sourcing, SG&A and
process and efficiency savings within two years and our long-term
annual synergy target of $320 million."

"As a result of extensive due diligence and joint
integration planning, Marriott is confident it can achieve $250
million in annual cost synergies within two
years after closing, up from $200 million estimated in November
2015 when announcing the original merger agreement."

What are these "synergies"?

Synergy is what you get when you eliminate redundancies to
cut costs. It usually means the closing and combining
of stores, warehouses, and offices: If the two pre-merger
companies each had their own warehouse in a city, the post-merger
company might only need one of those warehouses, and can save
money by shutting down the other.

The reason synergies should scare employees is that these
closures often come with job cuts.

Here's a very rough, back of the envelope calculation
that should be taken with a grain of salt illustrating the
effect synergies could have on employees at these two
companies. Assuming half of those potential synergies — $125
million at the hotel companies and $160 million at the paint
companies — come from reduced headcount and each worker costs the
company $75,000, we could see more than 1,600 employees
being let go at the hotel chains and 2,130 at the paint
companies.

The companies haven't announced or quantified any reductions in
headcount just yet. But those announcements
are probably coming.